Anticipatory bail: courts may refuse pre-arrest protection when prima facie large-scale GST input tax credit fraud necessitates custodial interrogation.

Where investigation materials disclose prima facie large-scale, structured fraudulent availing of input tax credit involving invoices from non-existent or suspended suppliers, documentary inconsistencies, and recorded statements suggesting a contrived modus operandi, custodial interrogation may be necessary; accordingly pre-arrest protection under anticipatory bail can be refused and the application denied. The analysis stresses the necessity of further investigative steps to verify supplier genuineness and transactional delivery before extending anticipatory relief in complex GST input tax credit fraud probes.

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Issues: Whether pre-arrest protection/anticipatory bail should be granted to applicants facing summons under Section 70 of the Central Goods and Services Tax Act, 2017 for alleged fraudulent availing of input tax credit.

Analysis: The Court examined the investigation materials and summons under Section 70 of the Central Goods and Services Tax Act, 2017 and noted prima facie findings that input tax credit was availed on invoices of non-existent or suspended suppliers, discrepancies between stock and documents, recorded statements indicating fraudulent activity, and the large monetary scale of transactions. The Court considered the relevance of custodial interrogation for uncovering the alleged modus operandi and the necessity of further investigation to verify supplier genuineness and transactional delivery. The Court also took into account the procedural context of anticipatory bail under Section 438 of the Code of Criminal Procedure, 1973 and earlier decisions declining pre-arrest protection in similar factual matrices, concluding that the ongoing investigation requires custodial questioning to unravel the alleged complex fraud.

Conclusion: Pre-arrest protection is denied; the application for anticipatory bail is rejected and the decision is against the applicants.

Ratio Decidendi: Where investigation materials disclose a prima facie case of large-scale, structured fraudulent availing of input tax credit involving non-existent or suspended suppliers and documentary inconsistencies, custodial interrogation may be necessary and pre-arrest protection can be refused.

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